The price of oil remained near $98 Thursday on a fall in U.S. crude stockpiles and optimism about growing demand in the world's largest consumer.

By early afternoon in Europe, benchmark U.S. crude for January delivery was up 5 cents to $97.85 a barrel in electronic trading on the New York Mercantile Exchange. The more heavily traded February contract was up 9 cents to $98.15.

On Wednesday, the January contract gained 58 cents to settle at $97.80 on news of falling U.S. supplies.

The Federal Reserve decided Wednesday to reduce its monetary stimulus for the U.S. economy because the job market has shown steady improvement. While the Fed's decision was seen boosting the dollar and making oil a less attractive asset for foreign investors, it also reflected optimism about economic developments and additional demand.

"A stronger U.S. dollar will play against commodities and will add to price pressure from the well-supplied oil picture for 2014," said Olivier Jakob of Petromatrix in Switzerland, noting that some investors had put money into oil futures exclusively because of the Fed's stimulus measures. "On the basis of investment flows and of the U.S. dollar, we therefore take the tapering as a negative input for oil prices in 2014."

Meanwhile, the U.S. Energy Department said Wednesday crude oil supplies fell by 2.9 million barrels last week. Supplies of distillate fuels like diesel fell, while gasoline supplies rose less than expected, helping to boost oil prices.

In London, the February contract for Brent crude, a benchmark for international oils, was up 60 cents to $110.23 a barrel on the ICE Futures exchange.

In other energy futures trading on Nymex:

— Wholesale gasoline prices added 1.767 cents to $2.7244 a gallon.

— Heating oil rose 1.53 cents to $3.0222 a gallon.

— Natural gas gained 7.1 cents to $4.322 per 1,000 cubic feet.